What a transatlantic trade and
investment agreement means
to the UK chemicals sector
Susan Brench,
Commercial Manager,
Briar Chemicals
“I
like doing business with Americans.
I like their ‘can do’ attitude and that they
are quick decision takers. We share common
values and we speak the same language in
terms of quality and efficiency standards.
Building a reputation is about making a
product right from the very first time, and
doing what you say you will do.
The UK chemical sector has long experience
of exports. In fact, UK SMEs often have
more experience of exporting than our
US counterparts. It is not uncommon for
companies like us to export 70% to 90% of
products overseas. And the US is particularly
interesting for chemical businesses
because of its sheer size and the number of
innovative market leaders based there.
Briar Chemicals employs over 200 people
and is based in Norwich. We provide worldclass contract manufacturing services to
global leaders in the agrochemical, fineand specialty-chemical sectors. Our activity
is focused on Contract Manufacturing.”
continued on page 3
Open for Business What a transatlantic trade and investment agreement means to the UK chemicals sector
T
his leaflet was published following the event
‘What a transatlantic trade and investment
agreement means to the UK chemicals sector’
organised on 18th June 2015 in Runcorn, North
West. The event explored the UK-US trade and
investment dimension in the chemicals sector and
the changes and benefits a transatlantic trade and
investment partnership (TTIP) agreement can bring
to business. Panellists included: Dr Geoff Mackey,
Sustainable Development & Communications
Director, BASF North Europe; Susan Brench,
Commercial Manager, Briar Chemicals; Neil Harvey,
Head of International Trade, Chemicals Industries
Association (CIA) and Paul Griffiths, Deputy
Head of the Transatlantic and International Unit,
Department for Business, Innovation & Skills
(BIS). The panel was chaired by Richard Currie,
Director of Public Affairs, UPS and Co-Chair of the
BritishAmerican Business (BAB) EU-US Forum.
The UK chemicals sector
The UK chemicals sector (including pharmaceuticals) is
an essential source of innovation and strength within
the wider UK economy. With around 500,000 jobs and
an annual turnover of almost £50bn, its sales equals
9% of all UK manufacturing1 and more than 18% of UK
manufacturing exports2. The North West hosts the
UK’s largest chemicals cluster, with an annual turnover
of over £10bn3. Today, 650 companies operate in the
sector, directly employing 50,000 people and making an
annual contribution of £3bn to the regional economy,
from multinationals such as Tata and BASF to small,
highly specialized enterprises like MEL Chemicals and
Plater Chemicals (Lancashire Chemicals).
resulting in a trade surplus with the US of around
£0.7bn in 20147. In the North West, around 20% of
manufactured chemical exports go to the US8. Within the
UK manufacturing sector, the chemicals sector receives
a large portion of foreign direct investment (FDI)9 for
which the US is the largest source by a wide margin10.
Barriers to trade
Whilst the chemicals sector is successful in trading
with the US, there remain a number of barriers to
greater and more effective trade:
• Tariffs on chemicals cost exporters to the US 3% on
average. Complete tariff elimination on chemicals
alone would give a £168m per annum boost to the
manufacturing economies of the US and the UK11.
• Different customs procedures and regulations
regarding issues such Safety Data Sheets and the
size of shipping containers, creating administrative
challenges and adding unnecessary costs.
• Non-tariff barriers based on different legislative
frameworks, such as duplicative standards and
regulations in regards to labelling, classification and
assessments.
What a transatlantic trade and investment
agreement means to the UK chemicals sector
Independent estimates suggest that an ambitious
agreement could increase UK chemicals sector exports
by 7%12. Many of the estimated savings will affect
the entire chemicals supply chain. A combination of
measures could allow industry to deliver this, including
the elimination of remaining tariffs, greater access to
public procurement, easing customs procedures and
greater regulatory coherence. Improved access to US
energy exports should also put downwards pressure
on energy prices.
The UK-US trade and investment dimension
The chemicals sector (including pharmaceuticals) is
Britain’s number one manufacturing exporter4. More
than 40% of annual production is exported outside the
EU5, with the US making up the largest share6. The US
is the UK’s largest non-EU trading partner for chemicals
with trade in non-pharmaceutical chemical products
accounting for £2.8bn in exports and £2.1bn in imports,
1
ONS (2015): UK Non-Financial Business
Economy 2013, Revised Results, SIC 20 +
21, 2013
2
ONS (2015): UK Trade in Goods by
Classification of Product by Activity CPA
(08), Quarter 1 (January to March) 2015, SIC
20 + 21, 2014, Current prices
3
Chemicals Northwest Website
4
Chemicals Industries Association Website
5
Ibid footnote 2
6
CIA (2014): Transatlantic Trade and
Investment Partnership (TTIP)
7
HMRC Tradeinfo
8
Chemicals Northwest
9
Government Office for Science (2013): How
attractive is the UK for future manufacturing
foreign direct investment? (page 10)
10
UKTI (2014): UKTI Inward Investment Report
2013-2014
11
Ibid footnote 6, based on its estimated
impact on aggregated UK-US trade across
the Atlantic
12
CEPR (2013): Estimating the Economic
Impact on the UK of a Transatlantic Trade and
Investment Partnership (TTIP) Agreement
between the EU and the US (page 41, based
on modified ambitious scenario)
13
European Commission: Chemicals in TTIP
Open for Business What a transatlantic trade and investment agreement means to the UK chemicals sector
Closer working on regulatory issues should
significantly improve the ease of doing business in
the US. Expected improvements include:
• allowing the exchange of relevant technical and
scientific information between regulators;
• holding bilateral consultations and developing
common methodologies;
• developing assessment priorities and agreement
on rules for classification and labelling.
TTIP will not lower standards and will not change
the statutory framework in the EU – the Regulation
on Registration, Evaluation, Authorisation and
Restriction of Chemicals (REACH), and the
Regulation on Classification, Labelling and Packaging
(CLP) or make the EU adopt the US Toxic Substances
Control Act (TSCA)13. A successful TTIP deal will help
create a better level playing field for UK companies,
making it easier for businesses to decide whether to
expand their business to the US.
Susan Brench continued
“With our supply chain team sourcing raw materials
and packaging materials worldwide and delivering to
an international customer network, I would say we
truly link the global to the local.
Export is key to our business model. With the EU,
US and Japan as our main target markets, we export
90% of our production! Briar Chemicals is ‘compliance
competent’ for import/export regulations, REACH and
the transportation of dangerous goods by road, rail,
sea and air. Corporate social responsibility and global
competitiveness go hand in hand for our business!
The big question for us is: Will TTIP create a ‘level
playing field’? A challenge for us is the fact that US
based companies’ energy costs can be significantly
lower. This reflects on raw material purchase prices
and toll conversion fees. It would make UK businesses
more competitive if we can secure lower cost energy
and raw material supplies.
A current disadvantage for EU chemical manufacturers
is the complex regulatory framework that applies
Briar Chemicals
throughout every single step of production and not
just to the end product. US companies are subject to
a different regime and when exporting to the EU, only
need to comply with registration of the final product –
so there is scope for harmonising regulatory compliance.
To some extent, negotiations with overseas clients
can be influenced by perceptions. For some US
manufacturers, particularly small ones, when they
think of importing or exporting it’s just too much of
a hassle to go through the paperwork needed. And
perceptions become reality. So I hope once TTIP is in
place, it will not only decrease tariffs but will get rid of
some of the administrative work of trading.
Furthermore, if we can standardise drums and
packages, we can make the most of our storage
spaces and shipping costs. There is definitely scope
for cost improvement through standardisation and
efficiency savings.”
The UK government is keen for industry
to provide further evidence of the barriers
it faces when trading and investing with
the US. Please get in touch at ttip.team@
bis.gsi.gov.uk. For further information,
please contact partners represented on the
back cover and click on links provided in
information box (on soft copy)
What a transatlantic trade and
investment agreement means to the UK
chemicals sector
This event will explore the UK-US trade and investment dimension in the
chemicals sector and the changes and benefits a transatlantic trade and
investment partnership agreement can bring to business. Participants will be
offered a unique platform for exchange and networking with insights from a senior
expert panel including local business, international companies, government and
trade BritishAmerican
associations. Business is the leading transatlantic business organization, dedicated to helping
companies build their business on both sides of the Atlantic. It incorporates the American Chamber
of Commerce (UK) and the British-American Chamber of Commerce (USA), which merged in 2000
to create a single, pre-eminent transatlantic organization under the BAB brand. We represent a
Agenda
pragmatic, creative and conscientious British-American business community
Locationand we are a driving
force for a pro-growth transatlantic economic zone.
Conference Centre The Heath,
Thursday 18 June 2015 | 10.00 – 13.00
10:00 Registration
for Business
is a series of industry
10:30OpenPanel
Discussion
events with the objective to explore the
11:30specific
Q&A
and opportunities
that a successful and
12:00changes
Networking
Lunch
comprehensive trade and investment partnership
(TTIP)event
agreement
can bring to are
UK sectors,
in
After the
participants
welcome
to
in regards
to the scope and
meet particular
speakers
and organisers
ofsectorthe
specific
content
of
the
agreement.
This
event, including: BritishAmerican initiative
aims toChemicals
build a nation-wide
sector caseChemical
for TTIP
Business,
Northwest,
and UK-US
trade and investment
in general
Industries
Association,
Department
for
that will contribute to the debate in the UK and
Business, Innovation & Skills (BIS), UKTI,
beyond.
Runcorn Cheshire, WA7 4QX
UK Government: TTIP
To book your place or for further
European
Commission:
Fact contact:
Sheet on
information,
please
Chemicals in TTIP
Emanuel Adam
Chemicals
Association
(CIA): TTIP
Policy &Industries
Public Affairs
Manager
[email protected]
The
Chemical Industry Council
020European
7290 9885
(CEFIC): TTIP
US Embassy and UPS.
By invitation only
Complimentary entry to pre-registered delegates
National
Partner
National partner
Local Partner
Local partner
Series Sponsors
Supported by
Supported by
ba
bc
NORTH WEST
BRITISH-AMERICAN
BUSINESS COUNCIL
Series sponsors
Contact:
Emanuel Adam
Policy and Public Affairs Manager
Email: [email protected]
Tel: +44 (0)20 7290 9885.
August 2015